Monday, February 27, 2012

IRS will allow a standard BUSINESS travel deduction of 55 cents per mile for 2011 tax returns. It is widely accepted as an accurate average cost of operating a vehicle in America. One penny of that 55 cent cost is for the gas tax collected that pays for roads. (About 27 cents of each gallon of gas pays for highways. The average car gets 27 miles per gallon.)

CTRMA will hold environmental impact hearings for the MoPac toll project on March 1 and 6 to assess the impact of tolling on people and the local economy. CTRMA proposes to collect a toll of approximately 55 cents per mile. (It could go as high as $1 per mile. The toll will be dynamic, although a floor of 26 cents per mile will apply at all times.) The toll rate will automatically escalate every year.

It is easy to see that the toll tax will raise the cost of driving by 100%. In the same way it is clear that the new tax raises the cost of road provision by 5,500%. (1 cent vs 55 cents per mile.) Some people think we should be kind to toll road users by refunding the 1 cent that they pay in gas taxes but that still leaves a 5,400% tax increase. The argument is irrelevant since both state and federal law prohibit a gas tax refund. (Business travelers will be able to claim a deduction for tolls paid.) BTW: a 55 cents per mile toll is equivalent to a $15 per gallon gas tax.

Some people believe that the higher cost will be worth the privilege of driving at higher speeds. This might be an illusion. CTRMA has not set the target speed for the toll lane but stated that 40 to 50 mph is under consideration. The latest info, which will probably by stated at the hearing, is that a minimum of 50 mph will be the target. (This is a computer generated number that will be revised when the lanes open so as to maximize profits for the private operator.) A similar HOV lane in Atlanta that was recently converted to toll resulted in much slower traffic on both the toll lane and free lanes. (Some people reject the tern "free" lane. I suggest they be called prepaid lanes but that is not how the public speaks. If they are to be called tax lanes then toll lanes should be called double-tax-plus-user-fee lanes.)

Why do toll lanes cost so much? A single tolled lane on MoPac takes up a minimum of 19 feet of pavement and 26 feet in other places. That is partially gained by reducing the width and reserve space (shoulders) on the free lanes. Expensive bridge work will have to be done, which would not be needed if a fourth free lane is built. There will be a need for very expensive flyovers that would not be needed for a free lane. All of this must be financed at approximately double the rate that would be paid for state bonding. A swarm of (private) bureaucrats are needed to operate the lanes. That is in addition to an increased number of public bureaucrats to oversee the private bureaucrats. To curry public approval, an expensive sound wall must be built. To win approval from enviros, bike lanes will be built on precious real estate. (Not seen in the graphic below.) For some reason the engineers specified expensive jersey barriers on both sides. I'm not sure if this is toll related.

Note the generous shoulders that promote safety. The 11 foot lane width would only be needed on several miles near downtown. This plan allows deferral of some bridge work and eliminates the rest. It could operate at 65 mph but I would propose 55 mph. This promotes safety and reduces sound impact. I would specify asphalt in the areas where sound walls are proposed. (This greatly reduces sound impacts.) The most important thing is that this free plan can be built for less tax money than will be put into building a toll road. It does not include bike lanes or sound walls.

CAMPO has been asked, by CTRMA, to approve "investing" $70 million of our tax dollars in the MoPac toll project. (Keep in mind that taxpayers have already paid for the $100 million worth of real estate being donated to the private company that will be given a monopoly to operate the toll lane.) Another $110 million of government funds will be put into the project but I am not certain which pool it comes from. I will find out.

CTRMA will ask a private company to add $70 million to complete the toll project cost of $250 million. I propose that we could build the lanes as a free project with our $70 million of tax money and avoid a host of problems that come with the toll plan. Why would TxDOT prefer the toll plan? TxDOT has already signed a contract with CTRMA that requires CTRMA to repay the $179 million you see in the graphic. It was tax money when it was put into the toll project but will become "surplus revenues" when TxDOT gets it back in 20 years. Texas law allows TxDOT (and CAMPO) freedom with how surplus revenues can be spent.

The money could be spent on more toll roads or train lines or bike paths. In essence, the money has been laundered through the toll road. TxDOT and CAMPO don't have to actually wait 20 years. JP Morgan will happily monetize the future money in 2014. Will we get another toll road or another Red Line?

Here is the kicker: The private company will get a turnkey contract that allows them full control over design, finance, construction and operation. They might be able to build the project for $179 million. They wouldn't have to invest a single penny. You would never know because they are not accountable. How do you know that TxDOT's estimate of $250 million is good? I can show you the contracts for the free flyovers just built on IH 35 @ Ben White. It cost $25 million. The contract for the nearly identical flyovers on US 183 @ 290E was let for $52 million. Politicians hail this as a great success because users of the 290E flyovers will pay $125 million in "user fees", AKA toll taxes. CAMPO put $90 million of Obama money into the 290E flyover project. Does your head spin? Welcome to fascism.

After the $179 million is repaid the private company will begin to earn large profits. It is plain to see that this is more fascism than the free market at work. The private company has minimal risk and primarily serves as a "tax farmer" for the state. The fascism is evident to people who visit the legislature, in session, and see the hordes of private companies writing our laws. Heritage.org has a page online explaining why they are lobbying the Congress to raise the federal gas tax; they say that private companies can't afford to build toll roads unless taxpayers are forced to pay for more of the construction cost. But, as the 290E project shows, we are already paying twice as much tax money to build toll projects than we would have paid to build free projects.

Who pays for the toll roads that fail? Not the fascists. Taxpayers do. Virtually every private toll road ever built went bankrupt. Fascist toll roads are a guaranteed loss for taxpayers, who are already forced to subsidize truckers and trains. Stop the subsidies for private leeches. If a private company wants to buy the MoPac right of way and build a toll lane, show me your $350 million. (That's right, pay for the ROW too.)

Fifteen years ago the state was asked to approve private operation of prisons. The state said that any offer to build and run prisons for 10% less than the state spent would be granted. Now the state is proposing to turn over our roads to private interests if they can increase the cost of building and operating the projects to several times what citizens are currently charged. Give me a break.

The House Ways and Means Committee (very powerful) voted in a new transportation funding formula today. It strips _all transit funding_ out of the Highway Trust Fund, meaning about 20% more federal money will be available for roads over the next 5 years. (More funding _may_ actually materialize since the bill would also divert certain oil and gas royalties _into the Trust Fund_.) Transit would be funded out of general revenues which are getting tighter.